WTI Crude Fluctuates, Discount to Brent Narrows on Seaway

Feb. 20 (Bloomberg) -- West Texas Intermediate fluctuated,
while its discount to North Sea Brent narrowed after Enterprise
Products Partners LP said supplies through its Seaway oil
pipeline will increase.

Futures were little changed after advancing by the most
since Feb. 11 in New York yesterday. Seaway volume will average
295,000 barrels a day from February to May, compared with
180,000 barrels last month, according to Enterprise. The Federal
Reserve will release minutes of its January meeting today. U.S.
crude stockpiles probably climbed a fifth week, according to a
Bloomberg News survey before a government report tomorrow.

“We expect subdued, macro-driven action with some
attention on the January Federal Open Markets Committee
tonight,” said Andrey Kryuchenkov, an analyst at VTB Capital in
London, who predicts that WTI will struggle to surpass $98 a
barrel this month.

WTI for March delivery, which expires today, dropped as
much as 22 cents $96.44 a barrel in electronic trading on the
New York Mercantile Exchange, and traded for $96.79 at 12:59
p.m. London time. The contract advanced 80 cents to $96.66
yesterday. The more active April contract advanced 10 cents to
$97.20. The volume of all futures traded was 7 percent above the
100-day average.

Brent for April settlement on the London-based ICE Futures
Europe exchange was at $117.13 a barrel, down 39 cents. The
volume was 26 percent below the 100-day average. The European
benchmark crude was at a premium of $19.92 to WTI, from $20.42
yesterday. The gap expanded to $23.18 on Feb. 8, the widest
since Nov. 26.

Oil Inventories

WTI slid by 7.1 percent in 2012 as the U.S. shale boom
deepened a glut at Cushing, Oklahoma, America’s biggest storage
hub and the delivery point for the New York contract. The
expansion of the Seaway pipeline, which runs from Cushing to the
Gulf Coast, was intended to help reduce that surplus.

The forecasts on Seaway volumes stem from a Feb. 15
testimony to the Federal Energy Regulatory Commission from
William Ordemann, senior vice president at Enterprise.

The Fed is scheduled to issue the minutes of its Jan. 29-30
meeting at 2 p.m. in Washington, which may provide details on
when it plans to start trimming stimulus measures. The U.S.
central bank said on Jan. 30 it is committed to buying about $85
billion of government and mortgage securities a month to support
growth. Minutes of the Fed’s Dec. 11-12 gathering showed members
divided between a mid- or end-of-year finish to bond purchases.

Gasoline Stockpiles

The Energy Information Administration is scheduled to
release its weekly report at 11 a.m. tomorrow in Washington, one
day later than normal because of the Presidents Day holiday on
Feb. 18.

U.S. crude supplies probably gained 2 million barrels last
week to 374.2 million barrels, according to the median estimate
of nine analysts surveyed by Bloomberg. It would be the longest
streak of increases since May.

The amount in storage for the week ended Feb. 8 was about
11 percent higher than the five-year average for the period,
according to data compiled by Bloomberg.

Gasoline stockpiles probably fell by 900,000 barrels, the
survey shows. Distillate inventories, a category that includes
diesel and heating oil, are expected to have dropped 1.5 million
barrels for a fourth week of declines.

The API collects stockpile information on a voluntary basis
from operators of refineries, bulk terminals and pipelines. The
government requires that reports be filed with the EIA, the
Energy Department’s statistics unit, for its weekly survey.

Brent Decline

WTI rebounded yesterday after failing to breach technical
support around $95 a barrel, data compiled by Bloomberg show.
This level is the trough between a “double-top” formed after
futures halted advances near $98 on Jan. 31 and Feb. 13. Buy
orders tend to be clustered near chart-support levels.

Brent crude will decrease in the second quarter on
seasonally weaker demand, according to Morgan Stanley. As the
oil market may tighten over the second half of this year,
investors should use “any material sell-off as a buying
opportunity,” Adam Longson, a New York-based commodity analyst
at the bank, said in an e-mailed report today.